Washington State Ferries’ vessel-construction track record fits Albert Einstein’s classic definition of insanity: doing the same thing over and over again and expecting different results.
Witness Todd Shipyard’s recent bid to build two 64-car Island Home ferries for the Port Townsend-Keystone run. The bid was so far off the mark that drop-dead sticker shock from WSF officials resulted — sticker shock unseen since March, when they opened a Todd bid for a 50-car Steilacoom II, a boat that inadequately serves the run today.
Both bids were largely driven by artificial, state-mandated price inflators that push costs through the roof.
Most glaring is the Legislature’s requirement that WSF only purchase boats built within Washington — a requirement that, despite legislation in 2001 and 2003 mandating them, hasn’t produced a new ferry since the Puyallup in 1999.
Einstein didn’t know the half of it.
Washington’s finances are a mess: A looming $5.1 billion budget shortfall, declining tax revenues and increasing private sector business failures add up to the state’s worst fiscal crisis since the Great Depression.
Shouldn’t we expect the Legislature to do everything it can to keep the costs of state projects as low as possible in order to minimize the impact on taxpayers’ wallets?
We can expect, but Senate Transportation Committee Chair Mary Margaret Haugen (D-Camano Island), barely pays lip service to the notion, preferring instead to stifle competition for ferry construction work, thus guaranteeing an eventual price tag millions of dollars higher than necessary.
In a recent Herald commentary, she said restricting ferry construction to in-state shipyards provides the best value for taxpayers.
Oh really? A look at the numbers and historic reality debunks her assertion.
The state estimated the cost of two Island Home ferries at $95.9 million, while the Todd bid came in 30 percent higher, at $124.5 million. Early this year, the state estimated the cost to build a Steilacoom II ferry at nearly $17 million, while the sole bid, again from Todd, came in more than 50 percent higher, at $26 million.
Is there a pattern here — a pattern of woefully underestimating costs? Or of overbidding since without real competition — again, Todd was alone both times — no incentives exist to bid closer to the estimates? Probably some of each, but the record shows much more of the former.
Documents obtained through public disclosure requests reveal acrimony between many in the local maritime community and WSF. For example, a letter from Todd CEO Stephen Welch to WSF accompanying the Steilacoom II bid catalogued WSF-generated issues that spiked the price.
E-mails between ferry officials and legislators describe a WSF “hassle factor” that forces shipyards to pad bids to compensate for difficulties inherent in dealing with the agency.
The Legislature’s consultants estimate that an out-of-state bidder such as VT Halter Marine of Pascagoula, Miss., could shave 20 percent off the eventual tab.
Halter built an Island Home for a Massachusetts ferry system to complete customer satisfaction despite disruption from Hurricane Katrina. The project was so harmonious and Halter so efficient that it’s a standard for ferry construction.
Yet, to prevent “outsourcing,” and because “cheaper isn’t always better,” Sen. Haugen slams the door in the face of this American company employing American workers building an American product in America.
Senator, the Civil War ended in 1865.
WSF and Sen. Haugen must think outside the box, out of their comfort zones. Opening bidding to out-of-state firms will help. WSF, and taxpayers, will have more options, while local shipyards will sharpen their pencils.
Since ignorance isn’t bliss, what harm is there in knowing what Halter might bid?
While it would be great to give the business to someone local — bid ties could go to the home team — it doesn’t take Einstein to see that the higher priority must be value for the taxpayer.
Scott St. Clair is a journalist with Evergreen Freedom Foundation, a free-market think tank based in Olympia. EFF’s ferry system efforts can be seen at www.Ferry-Tales.org, while St. Clair can be reached at scottstc@comcast.net.
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